The seven-member board of trustees voted unanimously to halt the bonuses a month after The Arizona Republic disclosed that five- and six-figure bonuses and additional pay were awarded to managers and investment staff even when the trust posted financial losses in 2008, 2009 and 2012.

The decision will save taxpayers $207,854, the amount budgeted for bonuses for the current fiscal year.

The payments were slated to be distributed next month based on investment returns for fiscal 2012-13, which ended June 30.

The trust posted an investment return of roughly 11percent this past fiscal year, though ex-staff members have expressed concern that the figure may be inflated.

That concern is fueled by PSPRS administrators’ decision to report in annual financial records higher values on local real estate it owns, rather than reporting lower values determined by an independent appraiser.

Reporting higher values could enhance bonuses because that improves the pension fund’s bottom line. But the issue becomes moot with Tuesday’s decision to suspend bonuses.

The dispute over real-estate valuations prompted internal disagreements over which figures to report, resulting in the resignations of three portfolio managers and the trust’s chief investment counsel since May 22.

Though the pension trust initially refused to release information about its bonuses this summer, The Republic pressed under state law for the documents. The Republic found that roughly $1.4 million in bonuses and additional compensation — including retention pay, retroactive salary adjustments and relocation reimbursements — went to a total of 14 employees from 2008 to 2012.

Because of this year’s staff resignations, it was unclear Tuesday how many employees were affected by the board’s action.

However, fewer than 10 staff members have been eligible for bonuses in any given year since 2008.

Tuesday’s vote has no bearing on retention bonuses scheduled for two high-level administrators in 2014.

Until Tuesday, board Chairman Brian Tobin and Administrator Jim Hacking had vigorously defended the bonus system, despite a political backlash from Gov. Jan Brewer, who appointed the entire board, and key legislators who thought the bonuses were extravagant. It also elicited concern from members of the pension system for the same reason.

Tobin said Tuesday that investment staff had been unfairly scrutinized, but system members’ interest in carefully scrutinizing costs was put ahead of the personal interests of staff members.

Hacking was on vacation and could not be reached. He previously posted an open letter on the PSPRS website saying the bonus program was part of a compensation system used to “attract and retain the best and the brightest to manage and administer the trust.”

Chief Investment Officer Ryan Parham presented the board with a resolution from him and Hacking asking that the bonuses be suspended until the “next compensation review” by the board.

Parham told the board that the bonus program had “attracted a lot of negative attention” and created an “almost hostile environment.”

Tobin added that his views had not changed on the bonus system, but he wanted to support Parham and Hacking’s position.

“This was designed to convey to the public and beneficiaries that we are aligned with their concerns,” Tobin said.

The proposal, however, was not supported by all staff members.

Deputy Chief Investment Officer Marty Anderson told the board that the resolution would eliminate what had been earned for the past fiscal year.

“It was not unanimous on the staff side,” said Anderson, who did not elaborate.

The decision does not influence contractual retention bonuses Parham and Anderson are slated to receive next year.

Parham, who draws a base salary of $268,000, has a contract that calls for a retention bonus next year of $75,000 should he stay employed through Sept. 19, 2014.

Anderson, who is paid $180,000 a year, is scheduled to receive a $60,000 retention bonus next year should he be employed through March 1, 2014.

Records show that Parham and Anderson were the largest recipients in the bonus system.

Parham received $480,997 in extra pay from 2008 to 2012, while Anderson received $265,470.

Anderson declined to comment after Tuesday’s meeting.

Past years’ bonuses were paid even though the Public Safety Personnel Retirement System lost money in some of those years and has underperformed when compared with other public retirement trusts. The trust, however, posted large profits in 2010 and 2011.

Levi Bolton Jr., executive director of the 13,000-member Arizona Police Association, said he had mixed emotions about the board’s decision.

Bolton said he had a problem with taking away something that was promised to employees. But he also said suspending the policy was not a bad idea, because questions have been raised about whether the bonuses were appropriate and whether financial reporting on land investments was properly done.

The PSPRS board oversees a $7.2billion trust serving three pension plans for police officers and firefighters, elected officials and correctional officers.

All three plans are significantly underfunded, primarily because of investment losses during the recession and the dot-com bust in 2000-01.

Taxpayers, through various governments that employ pension-system members, have been required the past few years to cover financial losses. Communities across the state also have not been filling vacant police and fire department positions recently because their payments to the public-safety pension trust escalated during the past few years.

Taxpayers contribute more when the pension plan’s funding ratio is low. The ratio measures the amount of money on hand against the amount needed to pay off all existing and future pension liabilities.

The funding ratios for the three plans sat between 58 and 68 percent in fiscal 2012, the most recent year for which figures were available.

The average funding ratio for public pension funds nationwide in 2012 was 74percent, according to a Tuesday presentation by Keith Brainard, research director for the National Association of State Retirement Administrators.